A tier-1 North American retailer uses Summit Automated Targeting™ to drive incremental sales of over $750,000 per week and generate 20,000 additional sales trips per week.
A tier-1 North American retailer with 1200 stores and revenues exceeding $12 billion maintained a large and active loyalty club with over 10 million members. Despite having ready access to historic loyalty club sales data, communications with club members was not personalized. The retailer’s marketing teams instead focused on costly mass media outreach with generic messages targeting club members and prospects. Moreover, the retailer was limited to offering club-wide discounts to drive store traffic, which negatively impacted margins.
The retailer made the strategic decision to move away from mass marketing toward more targeted, personalized marketing. Email was chosen as the communication channel owing to the retailer’s well-developed loyalty club member email database.
The goal of the campaign was to communicate to each customer a personalized set of offers in order to drive engagement. These offers would include both personal “Selected for You” coupons, and notifications of Temporary Price Reductions (TPRs) on items which would be chosen from the generic weekly flyer, based on past individual purchase history. It was crucial that these two types of offers be in complete synch – with no product, brand or category conflicts. Overall, the retailer needed to create a mix that would:
- Reward loyal customers for products they regularly purchased
- Tempt customers with items they had not yet purchased, but which are personally relevant to them
- Create a desirable mix of categories from the retailer’s point of view
- Maximize margins
- Create a relevant and highly-personalized set of offers that incentivized the shopper to visit a store
Most importantly, this targeting needed to take place within a tight timeline. The email was weekly, timed to be sent on the same day of the retailer’s flyer distribution. All offer definitions, product details, and historical data needed to be processed and the targeting file sent within this timeframe – every week, with no room for errors.
The retailer chose Sagarmatha’s Summit Automated Targeting™ solution to meet the challenge of producing massive quantities of highly-targeted offers, in a tight retail timeframe.
Each week, the retailer feeds Summit with historical sales data updates, the dynamic coupon offer pool of more than 1000 offers, and the list of available TPR’s. Within 24 hours of receiving the data, the engine targets each individual customer with the personalized set of coupons and TPR’s. In addition, each customer receives one personalized “hero coupon” per campaign, designed to meet customer-specific marketing needs such as store or category continuity and loyalty, preventing defection, upselling, cross selling into other categories, and more.
The retailer carefully measured incremental sales on a weekly basis by comparing recipients of personalized offers against a control group that did not receive offers. Moreover, trip frequency and incremental margin were closely monitored, as were the long-term loyalty of those customers who engaged with the personal offers.
The personalized email offers generated by Summit Automated Targeting™ have thus far been responsible for:
- Driving incremental sales of in excess of $750,000 per week with no negative effect on margin
- Up to 20,000 additional sales trips per week
- Significant rise in long term loyalty
Following the success of the first 12 months, the retailer moved from one personalized email per week to two per week, in addition to a range of category-specific personalized campaigns. Owing to the highly-positive ROI from these personalized email campaigns, the retailer was able to shift focus away from costly and generic mass media marketing.